CryptoCurrency - Bitcoin

Yesterdays, there were only physical cash using as the currencies. But with the improvement of the technology, now there are virtual currencies as well. By solving mathematical brain-teasers using a computer, these virtual currencies are being produced. Therefore the term 'Cryptocurrency' is being used in general to identify those currencies. There are many cryptocurrencies nowadays. Ethereum, Litecoin, Dash, Bitconnect, Bitcoin, Bitecoin and Zcash are some of those virtual currencies. Among those units, Bitcoin is the most popular Virtual Currency. It is the most valuable virtual currency as well.



Bitcoin Value

Bitcoin is producing since 2009 where it required 1300 bitcoins to buy a US dollar. Its value was so low at the beginning of the currency. After 4 years from its birth, that means in December of 2013, it required 1300 US dollars to buy a bitcoin. That means the value of a bitcoin has gone up by a noticeable price within that four years. After 8 years from the birth in December of 2017, the value of a bitcoin was marked as 13000 US dollars. In May of 2017, the value of a bitcoin was only 2000 US dollars where it increased up to 1800 US dollars by the December. Now the value of a bitcoin is placed above 15000 US dollars. These show us how the bitcoins have grown so fast, and it is the most valuable currency that has been used ever in the history.

Bitcoin Technology 

Bitcoin technology was found as a combination of a protocol and a cryptography. Bitcoin program is an open source program where anyone can reach and do improvements to the source code of the program and even can distribute the improved version under their names. That's the reason why we can find many cryptocurrencies nowadays.
Bitcoin network is a peer-to-peer currency transferring method. If any computer needed to join this network, it must be transformed into a device which can run the bitcoin protocol. By installing a special program, such as Bitcoin Client, it can be done easily. 

Bitcoin Founder

The protocol which can be used to create a bitcoin network was first released to the internet through a survey sheet in 2008. It was done by someone called 'Satoshi Nakamoto', where everyone believes that it's an alias. Yet, the world doesn't know who is Satoshi although many people introduced themselves as Satoshi, but failed to prove it at all.

Bitcoin Mining

'Bitcoin Mining' means, producing bitcoins using a computer connected to a mining pool, with the help of a bitcoin client program. And the computers used for bitcoin mining are called as 'miners'.
When such miner is connected to a bitcoin network, that computer receives an algorithm (a complex mathematical crux with instructions to solve it) and that algorithm automatically gets solved using the capacitance of the processor of the computer. A database is being created in the miner computer containing all the information regarding the process of solving the above mentioned algorithm. That database is a hash where the miner computer doesn't own any single use of it. These hashes get recorded in the bitcoin network which means it creates a ledger about every bitcoin earned using the relevant miner computer. Normally other ledgers such as bank information ledgers are secretly maintained. They don't share the data with everyone. But this bitcoin ledger is a public ledger where anyone who's connected to the bitcoin network can download and go through all the information recorded in that ledger about the bitcoins earned and the bitcoin transactions. That bitcoin ledger is called as 'Blockchain'. Likewise, anyone can earn bitcoins on their own.

Bitcoin Block

Bitcoins transferred and either added to the ledger as an unit called 'Block'. In this block, there is a 'Bitcoin ID' which contains a digital note of identifying the owner and a note saying that the hash database which was created in the miner computers while mining bitcoin, has been approved as real bitcoin currencies.
That means a 'block' is a data collection of all the information of a bitcoin from its birth. It is a special algorithm (SHA - 256 hashing algorithm). This is what we call as a bitcoin which can be transferred. There is a unique address for each block which is called as a 'Private Key'. Only the owner knows the private keys of their blocks. To transfer bitcoins, it is essential to know this private key. As the owner is the only one who knows the private key, there is no possibility of stealing bitcoins of others. 
According to the bitcoin protocol, there must be only 21 million bitcoin blocks in this currency type. It has already filled with 15 million bitcoin blocks and only left more 6 million bitcoin blocks. According to the bitcoin technology, the bitcoin reward given to the blocks produced gets reduced by half from the current reward value, every 4 years. Likewise, it will take more 123 years to produce the remaining 6 million bitcoin blocks. That means it will be done in the year 2140. It will help the bitcoin value not to die ever as it controls the increase in the number of bitcoins.

Bitcoin Wallet

A client program called 'Bitcoin Wallet' must be used to trade using bitcoins (exchange bitcoins). The interface of a bitcoin wallet is easy to understand and to use. It can be used to exchange bitcoins, buy or sell bitcoins. It shows the report of your bitcoin account like a bank account. 
There are three ways you can use to add bitcoins to your wallet. 
  1. Bitcoin Mining - As described above anyone can add bitcoins to their wallet by mining
  2. Exchange or as a gift - Exchange something you own for bitcoins of another or as a gift from a bitcoin owner
  3. Buy Bitcoins paying real money - Spend money using in the real world and buy bitcoins
There are many companies which produce Bitcoin ATM machines which can be used to transform your money into bitcoins using your ATM card. This is also a method of buying bitcoins spending the real world money.

Bitcoin Transactions

Although bitcoins are not approved by any government, it is not illegal. Bitcoins can be used in the barter method. There are many stores in America, England; even in Turkey, China and Japan. Also, there are many online services which provide the ability to trade using bitcoins. That means goods and services can be bought using bitcoins nowadays.

Bitcoin Types

1 Bitcoin       =    1 BTC     
1 Milicoin     =    0.001 BTC
1 Microcoin  =    0.000001 BTC
1 Satoshi       =    0.00000001 BTC

Bitcoin Regarding Accessories

There are many accessories nowadays which can be used even from the very first stages of bitcoins, that means even from the bitcoin mining level. There are some special graphics cards (GPU) called as 'Bitcoin Mining Hardware'. Also there are some accessories produced using such annexes together. They are called as 'ASIC - Application Specific Integrated Circuit' and they are helpful to increase the speed of the bitcoin mining process than the usual speed. Also, there are many more tools and accessories that can be used to work with bitcoins.

Bitcoin Dangerous Circumstance

Bitcoin is not recognized as a very good investing method. There is not a single guarantee for the bitcoins and they can be lost at any time. On 21st of November 2017, an online organization named 'Tether' lost their bitcoins which's estimated value was about 31 million US dollars, from their bitcoin wallets because of the bitcoin hackers. Also On 06th of December 2017, the company named 'Nice Hash' in Slovenia lost their bitcoins worth 60 million, from their wallets. This is kind of more dangerous than losing money in a bank as the lost bitcoins cannot be found as you get your money back when it comes to a money lost in a bank. It's because there are no one who is responsible for bitcoins and there is no extra bitcoins to be found. So before you invest in bitcoins you must think carefully.

Bitcoin Future

Bitcoins gives a great idea of future digital currency improvement. It can be used to understand how the virtual currency will work in the future. It cannot be thrown away totally now with its improvement. Only thing can be done is bring-out proper rules and regulations regarding virtual currencies. This can be developed well as a digital cash service like social networking, electronic trading, online banking. The concept of improving/ developing this digital cash service can be taken by having a look on this Cryptocurrency; Bitcoins.





Comments

  1. Very informative, for those curious about the cryptocurrency world

    ReplyDelete
  2. Indeed, Bitcoin has become the face of crypto-currency. In 2018, we saw bitcoin value reach its peak. It won't be suprising if in 5 to 10 years everything runs on crypto currency. Thank you for sharing.

    ReplyDelete
  3. Crpto-currency is such a great concept. But very expensive one. And yet it has not any legal approval so it is risky. Good information to know. Thanks for sharing!

    ReplyDelete
  4. This is such great information, thanks for sharing this..

    ReplyDelete

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